eTrade 2009 Annual Report Download - page 86

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Interest Rates and Operating Interest Differential
Increases and decreases in operating interest income and operating interest expense result from changes in
average balances (volume) of enterprise interest-earning assets and liabilities, as well as changes in average
interest rates (rate). The following table shows the effect that these factors had on the interest earned on our
enterprise interest-earning assets and the interest incurred on our enterprise interest-bearing liabilities. The effect
of changes in volume is determined by multiplying the change in volume by the previous year’s average yield/
cost. Similarly, the effect of rate changes is calculated by multiplying the change in average yield/cost by the
previous year’s volume. Changes applicable to both volume and rate have been allocated proportionately (dollars
in millions):
2009 Compared to 2008
Increase (Decrease) Due To
2008 Compared to 2007
Increase (Decrease) Due To
Volume Rate Total Volume Rate Total
Enterprise interest-earning assets:
Loans, net(1) $(245.7) $(204.0) $(449.7) $(190.3) $(207.9) $ (398.2)
Margin receivables (122.8) (16.9) (139.7) (76.0) (147.9) (223.9)
Available-for-sale mortgage-backed
securities 40.1 (39.1) 1.0 (143.2) (71.8) (215.0)
Available-for-sale investment securities 34.6 (7.8) 26.8 (252.2) 1.7 (250.5)
Trading securities (31.6) 10.6 (21.0) 17.4 (5.3) 12.1
Cash and cash equivalents(2) 38.7 (80.3) (41.6) 50.8 (24.6) 26.2
Stock borrow and other (6.7) 0.8 (5.9) (14.0) (1.6) (15.6)
Total enterprise interest-earning assets(3) (293.4) (336.7) (630.1) (607.5) (457.4) (1,064.9)
Enterprise interest-bearing liabilities:
Retail deposits 13.9 (379.1) (365.2) (23.4) (206.2) (229.6)
Brokered certificates of deposit (40.4) 1.5 (38.9) 23.2 0.3 23.5
Customer payables 2.3 (23.2) (20.9) (14.2) (23.6) (37.8)
Repurchase agreements and other borrowings (20.2) (81.8) (102.0) (205.0) (120.1) (325.1)
FHLB advances (80.8) (5.5) (86.3) (115.1) (30.4) (145.5)
Stock loan and other (6.8) (9.4) (16.2) (6.0) (15.1) (21.1)
Total enterprise interest-bearing
liabilities (132.0) (497.5) (629.5) (340.5) (395.1) (735.6)
Change in enterprise net interest
income $(161.4) $ 160.8 $ (0.6) $(267.0) $ (62.3) $ (329.3)
(1) Nonaccrual loans are included in the respective average loan balances. Income on such nonaccrual loans is
recognized on a cash basis.
(2) Includes segregated cash balances.
(3) Amount includes a taxable equivalent increase in operating interest income of $2.1 million, $9.1 million and
$30.9 million for years ended December 31, 2009, 2008 and 2007, respectively.
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